Avago FYQ3 Beats, Q4 View Light

By Tiernan Ray

Shares of wireless chip maker Avago Technologies (AVGO) are down 61 cents, or 1.7%, at $36.30, after the company this afternoon reported fiscal Q3 revenue and earnings per share that topped analysts’ expectations, but projected this quarter’s results below consensus.

Revenue in the three months ended in July rose slightly, year over year, to $606 million, yielding EPS of 72 cents.

Analysts had been modeling $601 million and 63 cents.

Gross margin in the quarter was 51.2%, up from the prior-year’s 51.7%.

For the current quarter, the company projects revenue to be in a range of flat with the prior quarter to up 3%, which would equate to as much as $624 million. That is below the average $635 million estimate.

Gross margin on a non-GAAP basis is projected to remain roughly flat with last quarter at 51.3%.

CEO Hock Tan said the company “achieved healthy sales growth helped by a continued recovery in Asia industrial, modest strength in wired infrastructure, and the last-time buys in consumer navigation,” but added that this quarter, “without meaningful revenue contribution from consumer navigation products and with uncertain demand in carrier routing, we expect to show only low single-digit growth despite a very strong ramp in wireless.”

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.